Outstaffing is the rental by a business of a specialist from a third-party contractor. In some cases, a business that does not have an employee with the required competencies on its staff rents employees with the required skills from another company (outstaffer).
In this way, the client company pays for the outstaffing services to the contracting company under the contract according to its commitments. The rented employee for the duration of the agreement becomes part of the client company’s team, and his actions are directed and controlled by the client’s managers. At the same time, the employee remains legally and financially bound to the outstaffer, i.e. he receives salary, sick leave and vacation pay according to his own labor contract concluded earlier with the outstaffer.
Benefits of outstaffing
- Legal guarantees. The client company enters into an agreement with the outstaffing company to hire an employee with certain competencies. Even if the required employee is unable to work for some reason, the contracting company will provide another one within a short period of time.
- No need to resolve labor disputes. The client company frees itself from the need to conduct possible legal disputes with the hired employee.
- Financial gains. Quite often client companies use outstaffing services in countries where the cost of labor is lower on average. This allows them to save money on labor remuneration for highly qualified employees, and also eliminates the need to deal with complex taxation issues when hiring foreign specialists.
The main disadvantage of outstaffing for the client is the possibility of losing money in case of cooperation with an unscrupulous contractor.